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AFX News: Sakhalin-2 must comply with clean-up laws or face shutdown – minister UPDATE

Friday, 20th October 2006 09:25

MOSCOW (AFX) – The giant Sakhalin-2 oil and gas project must comply with Russian environmental laws or face being shut down, said Natural Resources Minister Yury Trutnev.

‘If the Russian Federation’s laws are going to be violated, if damage is done to the environment, we will take measures to stop the project,’ Trutnev told reporters.

A Royal Dutch Shell PLC-led consortium holds a 55 pct stake in the project, whose permits the ministry revoked last month.

The Anglo-Dutch oil giant subsequently said it had ‘fully addressed’ environmental concerns.

Earlier, Interfax news agency quoted Deputy Industry and Energy Minister Andrei Dementyev as saying the project’s operator Sakhalin Energy has raised its estimate of the cost of the project to 21.9 bln usd from 9.9 bln.

The Industry and Energy Ministry is now in talks with Sakhalin’s investors regarding the possibility of reviewing the project’s business model, he added.

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